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The real estate sector in Australia will soon be affected by Tranche 2 reforms which aim to streamline the country’s regulatory framework. Professionals in the real estate sector must understand their obligations and develop a risk-based AML programme.
\nThe real estate sector in Australia has long been targeted by money launderers. Between 2019 and 2024, AUSTRAC data shows that the Australian Federal Police seized over $1.1 billion in illegal assets, including over $720 million in real estate and 370 confiscated properties. In 2023, the AFP confiscated $229 million in laundered real estate.
\nAccording to AUSTRAC, if a business provides any of the following services, it must comply with the new AML/CTF reforms:
\nNew legislation (Tranche 2) will expand AUSTRAC’s AML requirements to real estate brokers, property developers, and buyers’ agents beginning 1 July 2026, with enrolment starting 31 March 2026.
\nKey obligations include:
\nReal estate brokers engage with a wide range of clients and high-value transactions, making some transactions significantly more likely to involve money laundering or terrorism financing than others. A risk-based AML program ensures resources are focused on the following:
\nBegin by identifying possible money laundering/terrorism funding (ML/TF) concerns throughout your organisation. Consider the following factors:
\nDevelop and implement policies, procedures, and controls to effectively address the identified risks. This could include Enhanced Due Diligence (EDD) for high-risk consumers, transaction monitoring regulations targeted to certain risks, and stronger onboarding requirements for certain regions or industries.
\nEnsure that your overall AML programme stays successful and in line with regulatory standards. Ensure regular evaluations or audits of your controls, evaluate the effectiveness of policies and processes, track key compliance indicators, and provide adequate staff training, among other things.
\nMaintain detailed records of your risk assessment, control, and monitoring actions. Make sure your reporting to senior management and regulators reflects a clear, risk-based compliance structure.
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NameScan helps businesses of all sizes – from small firms and mid-tier practices to large enterprises – navigate the complexities of Tranche 2 compliance with ease. Our flexible screening and verification solutions are designed to meet the unique needs of each organisation, ensuring they can identify risks, meet AML/CTF obligations, and remain compliant without unnecessary overheads. With our Pay-As-You-Go (PAYG) model, businesses can access powerful compliance tools without committing to long-term contracts or large upfront costs, making regulatory compliance both accessible and cost-effective for every type of business.
\nTranche 2 refers to the long-anticipated reforms to Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime. It extends obligations to ‘Designated Non-Financial Businesses and Professions’ (DNFBPs), such as lawyers, accountants, real estate agents, trust and company service providers, and dealers in precious metals and stones.
\nAustralia has been under pressure from the Financial Action Task Force (FATF) to bring DNFBPs into the AML/CTF regime, as these sectors are often exploited by criminals to launder money and finance terrorism. Tranche 2 aims to close regulatory gaps and strengthen Australia’s defences against financial crime.
\nLawyers, conveyancers, accountants, real estate agents, trust and company service providers, and dealers in precious metals and stones will need to comply with AML/CTF obligations such as customer due diligence, record-keeping, reporting, and risk assessments.
\nObligations are expected to include customer due diligence (CDD), ongoing monitoring, suspicious matter reporting, record-keeping, and establishing an AML/CTF compliance program tailored to the business’s risk exposure.
\nBusinesses should start assessing their risk exposure, reviewing customer onboarding processes, and exploring AML/CTF solutions for due diligence and ongoing monitoring. Early preparation will make the transition smoother once the reforms take effect.
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